Shut Up Henry

Meet Henry, or rather, meet HENRY: the High Earner, Not Rich Yet. You’ve seen him in every Telegraph op-ed and Daily Mail sidebar for the last three years. He is the man earning £125,000 a year who somehow feels like a Victorian street beggar. He is the professional who spends his weekends staring into a glass of organic Malbec, wondering why - despite being in the top 2% of earners, his lifestyle currently mirrors that of a moderately successful 1970s bus driver.

The British press is obsessed with him. They treat the 60% tax trap like a humanitarian crisis, painting the loss of a personal allowance as a tragedy on par with the 165k children living in temporary accommodation. We are told, through a constant stream of tear-stained opinion pieces, that Henry is a victim of a greedy state that hates success. Henry, bless him, has started to believe his own press. He’s convinced that if the Chancellor just stopped punishing him, he’d finally be able to afford that four-bed detached in a leafy suburb with a driveway wide enough for his ego.

You earn £125,000. You are in the top 2% of earners in the country. Yet, you’re currently in a group chat with four other HENRYs complaining that the 60% tax trap is the reason you still live in a two-bed flat with a damp problem in Zone 3.

It is true that the tax is high and has some quirks; between £100k and £125k, the tax burden increases dramatically. But if you think a tax cut is the solution to your personal crisis, I have one piece of advice: Shut up.

The HENRY mindset is obsessed with individual take-home pay, seemingly forgetting HENRY isn’t a person but a class. They think that if the Chancellor moved a few tax brackets and gave them an extra £800 a month, they’d finally get that garden or the school catchment area they’ve been eyeing up.

This assessment is incorrect. In a supply constricted market like the UK, a tax cut for high earners is not a wealth creator, but landlord subsidy or another equity pump into Britains greatest pyramid scheme, the housing market.

If every HENRY in London gets a tax break tomorrow, you will all take that extra cash to the same three open-house viewings, and you will simply outbid each other with the government’s money. The house still goes to the same person; the only difference is the price tag is £40,000 higher. You didn’t get richer; the seller did.

You likely think social housing is someone else’s problem, a benefits handout which you a higher earner are subsidising. Ironically, it’s the lack of social housing that is currently eating your salary. In more ways than one, in the direct sense because of higher rents and the indirect sense due to tax money being spent on subsidising landlord profits in the form of housing benefit.

The stopping of building council homes didn’t end the need for them. Millions of people have now been pushed into the private rented sector. The result, demand for accommodation has outstripped supply several times over. With an estimated 6 million housing shortfall.

What you are currently paying is a scarcity tax, one only public investment in the construction of housing can solve. A tax cut for you just reduces the states capacity to engage in this much needed investment.

Mirror, mirror on the wall, who is soon to be the biggest NIMBY of them all? The uncomfortable truth is many HENRYs are just Pre-NIMBYs. You spend your 30s complaining that there are no houses, then you spend your 40s protecting the character of your neighbourhood once you finally get a mortgage. Eagerly pulling up the ladder for the HENRYS coming after you.

If HENRYs want to improve their lives, they should stop lobbying (whining) for 1p off the higher rate or some adjustment to the payback of the tax-free allowance. The emphasis needs to be on supply. This means social housing and state investment.

Conclusion

The tax system is annoying, but the housing market is broken. A tax cut is a temporary hit of dopamine that leaves you in the same bidding war with a slightly larger pile of Monopoly money. Ultimately, if this theoretical tax cut helps you squirm your way on the housing ladder, it just makes it more difficult for the next person, should we cut taxes again for that person?

If you want to be rich, stop looking at your payslip and start looking at your outgoings, the endless complaints of the 60% marginal rate, but then silence when you’re paying your landlord £2000-3000 a month in rent for a 1 bed. Taxes pay for all government services, rent pays for your 1 bed flat, one is clearly better value for money. Maybe ask your landlord for a rent reduction – if you think that’s absurd why do you think tax cuts for you are any different?

Until you demand more house building and fewer tax tweaks, you aren’t a victim of the state, you’re just a participant in your own stagnation. Wanting a leg up but not fixing the fundamentals of this broken system just leaves the people after you in the exact same position; this is intensely selfish.

If you believe you are uniquely deserving because of you high earning status, then surely the high earners of the next generation are just as deserving. Yet this policy would only disadvantage them further. So do not pretend your position is just; it lacks any care for others, even those within your own class. It is entirely about advancing yourself over others.

So, please, Shut up.

Post scriptum

There is one exception to this, that being the removal of free childcare as a benefit for high earners. I think this is wrong; while housing is a supply-side failure, childcare should be a universal benefit rather than some humiliating means-test which undermines buy-in from citizens. Universalism creates a shared stake in the state; means-testing just creates a class of people who pay for everything and feel a part of nothing; Especially on a benefit so intimate and at a time where the birth rate has fallen below replacement.

Focusing on making other people’s lives better will make yours better; focusing on yourself will leave everyone else out to dry.